[House Report 107-77]
[From the U.S. Government Publishing Office]



107th Congress                                             Rept. 107-77
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

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TO AMEND TITLE 49, UNITED STATES CODE, TO PERMIT AIR CARRIERS TO MEET 
  AND DISCUSS THEIR SCHEDULES IN ORDER TO REDUCE FLIGHT DELAYS, AND FOR 
  OTHER PURPOSES

                                _______
                                

  May 23, 2001.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

     Mr. Young of Alaska, from the Committee on Transportation and 
                Infrastructure, submitted the following

                              R E P O R T

                        [To accompany H.R. 1407]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Transportation and Infrastructure, to whom 
was referred the bill (H.R. 1407) to amend title 49, United 
States Code, to permit air carriers to meet and discuss their 
schedules in order to reduce flight delays, and for other 
purposes, having considered the same, report favorably thereon 
with an amendment and recommend that the bill as amended do 
pass.
  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SCHEDULING COMMITTEES, DISCUSSIONS, AND AGREEMENTS.

  (a) In General.--Chapter 401 of title 49, United States Code, is 
amended by adding at the end the following:

``Sec. 40129. Air carrier discussions and agreements relating to flight 
                    scheduling

  ``(a) Discussions To Reduce Delays.--
          ``(1) Request.--An air carrier may file with the Secretary of 
        Transportation a request for authority to discuss with one or 
        more other air carriers or foreign air carriers agreements or 
        cooperative arrangements relating to limiting flights at an 
        airport during a time period that the Secretary determines that 
        scheduled air transportation exceeds the capacity of the 
        airport. The purpose of the discussion shall be to reduce 
        delays at the airport during such time period.
          ``(2) Approval.--The Secretary shall approve a request filed 
        under this subsection if the Secretary finds that the 
        discussions requested will facilitate voluntary adjustments in 
        air carrier schedules that could lead to a substantial 
        reduction in travel delays and improvement of air 
        transportation service to the public. The Secretary may impose 
        such terms and conditions to an approval under this subsection 
        as the Secretary determines are necessary to protect the public 
        interest and to carry out the objectives of this subsection.
          ``(3) Notice.--Before a discussion may be held under this 
        subsection, the Secretary shall provide at least 3 days notice 
        of the proposed discussion to all air carriers and foreign air 
        carriers that are providing service to the airport that will be 
        the subject of such discussion.
          ``(4) Monitoring.--The Secretary or a representative of the 
        Secretary shall attend and monitor any discussion or other 
        effort to enter into an agreement or cooperative arrangement 
        under this subsection.
          ``(5) Discussions open to public.--A discussion held under 
        this subsection shall be open to the public.
  ``(b) Agreements.--
          ``(1) Request.--An air carrier may file with the Secretary a 
        request for approval of an agreement or cooperative arrangement 
        relating to interstate air transportation, and any modification 
        of such an agreement or arrangement, reached as a result of a 
        discussion held under subsection (a).
          ``(2) Approval.--The Secretary shall approve an agreement, 
        arrangement, or modification for which a request is filed under 
        this subsection if the Secretary finds that the agreement, 
        arrangement, or modification is not adverse to the public 
        interest and is necessary to reduce air travel delays and that 
        a substantial reduction in such delays cannot be achieved by 
        any other immediately available means.
          ``(3) Secretarial imposed terms and conditions.--The 
        Secretary may impose such terms and conditions on an agreement, 
        arrangement, or modification for which a request is filed under 
        this subsection as the Secretary determines are necessary to 
        protect the public interest and air service to an airport that 
        has less than .25 percent of the total annual boardings in the 
        United States.
  ``(c) Limitations.--
          ``(1) Rates, fares, charges, and in-flight services.--The 
        participants in a discussion approved under subsection (a) may 
        not discuss or enter into an agreement or cooperative 
        arrangement regarding rates, fares, charges, or in-flight 
        services.
          ``(2) City pairs.--The participants in a discussion approved 
        under subsection (a) may not discuss particular city pairs or 
        submit to another air carrier or foreign air carrier 
        information concerning their proposed service or schedules in a 
        fashion that indicates the city pairs involved.
  ``(d) Termination.--This section shall cease to be in effect after 
September 30, 2003; except that an agreement, cooperative arrangement, 
or modification approved by the Secretary in accordance with this 
section may continue in effect after such date at the discretion of the 
Secretary.''.
  (b) Conforming Amendment.--The analysis for such chapter is amended 
by adding at the end the following:

``40129. Air carrier discussions and agreements relating to flight 
scheduling.''.

SEC. 2. LIMITED EXEMPTION FROM ANTITRUST LAWS.

  Section 41308 of title 49, United States Code, is amended--
          (1) in subsection (b) by striking ``41309'' and inserting 
        ``40129, 41309,''; and
          (2) in subsection (c)--
                  (A) by inserting ``40129 or'' before ``41309'' the 
                first place it appears; and
                  (B) by striking ``41309(b)(1),'' and inserting 
                ``40129(b) or ``41309(b)(1), as the case may be,''.

                                Purpose

    The purpose of H.R. 1407 is to reduce delays in departures 
and arrivals of aircraft at airports.
    H.R. 1407, as reported, authorizes the Secretary of 
Transportation to approve limited antitrust immunity to 
airlines to meet and discuss their schedules under the 
supervision of the Department of Transportation (DOT).
    The bill is a response to the congestion and delays that 
have plagued the aviation system in recent years. Between 1995 
and 1999, FAA reported a 58% increase in flight delays. FAA 
data shows that in 2000, delays were up an additional 20% over 
1999. According to the Bureau of Transportation Statistics, 
almost 40% of flights were delayed or canceled last December.
    Last year was the worst on record for airline delays. Some 
fear that this summer could be as bad, if not worse.
    In the long term, the solution to the flight delay problem 
is to increase capacity. This involves building new runways, 
modernizing the air traffic control system and redesigning the 
routes that aircraft fly. However, most of these solutions will 
likely take years to bear fruit. The Committee believes that 
action is needed now to help alleviate this problem.
    The Committee is aware that some suggest using congestion 
or peak hour pricing to dampen demand or spread flights 
throughout the day in order to reduce delays. The reported bill 
does not adopt that approach. Higher fees would likely be 
passed on to passengers in the form of higher fares at a time 
when people some complain that fares are too high. Also, 
smaller airlines, new airlines, and airlines that serve small 
communities would likely be priced out of the market by higher 
fees. This would result in less competition and reduced service 
to small communities. Coordination of airline schedules, 
properly supervised by DOT, should not have these negative 
affects.
    The immunity approach in H.R. 1407 is similar to the 
approach taken in 1984 and 1987. On August 31, 1984, the Civil 
Aeronautics Board issued order 84-8-129 granting antitrust 
immunity to airlines to meet and discuss their schedules. In 
1987, the Department of Transportation (DOT) issued a similar 
grant of antitrust immunity. In both cases, the immunity 
allowed airlines to meet for the purpose of coordinating 
schedules and led to a reduction in delays. There is no 
indication that it led to less competition or higher fares. 
However, in 1989, DOT's antitrust immunity authority lapsed.
    In April, FAA issued its Airport Capacity Benchmarks 
Report. These benchmarks show that during certain periods of 
the day, the number of scheduled flights exceeds the capacity 
of the airport while during other times there is room for 
additional flights. Under H.R. 1407, airlines could meet and 
discuss adjustments in their schedules to reduce these peaks 
and thereby reduce delays. There would not necessarily be any 
reduction in the total number of flights.
    Some have expressed concern that this bill would be 
anticompetitive. However there are safeguards included in the 
bill to ensure that nothing improper occurs. The primary 
safeguard is that any airline meeting would have to be approved 
by DOT and monitored by DOT officials. Any agreement reached as 
a result of that meeting could not go into effect unless it is 
approved by DOT.
    Others have expressed concern that this legislation would 
harm air service to small communities. Under current law, 
airlines are free to enter and leave markets as long as no 
community listed on an airline certificate in 1978 is left 
without any air service. Nothing in this bill is intended to 
change that.
    Nevertheless, the Committee is aware that some small 
communities may feel that their air service would be 
particularly vulnerable under this legislation. It is important 
to note that the objectives of the bill can be achieved by 
adjusting the timing of the flights without actually 
eliminating any flights. However, in order to alleviate any 
concerns that may exist, the reported bill authorizes the DOT 
Secretary to impose terms and conditions on an airline 
schedule-adjustment agreement to protect the public interest or 
to protect air service to communities that are characterized as 
small hubs or non-hubs. This is not intended to give the 
Secretary any new powers to require air service to small 
communities outside of the agreement.
    On April 26, 2001, the Subcommittee held a hearing on H.R. 
1407. At that time, the airlines and the air traffic 
controllers testified in support of the bill. In addition, the 
Air Line Pilots Association submitted a letter expressing its 
support for the legislation. At an earlier hearing on April 4, 
Secretary Mineta indicated that he supported the antitrust 
immunity approach.

                Section-by-Section Summary of H.R. 1407

    Section 1 establishes a new Section 40129 in Title 49 of 
the U.S. Code.
    Paragraph (a)(1) authorizes an airline to request from DOT 
authority to meet with other airlines or foreign airlines in 
order to discuss their schedules in an effort to reduce delays.
    Paragraph (a)(2) authorizes the Secretary of DOT to approve 
any request filed under (a)(1) if the Secretary finds that the 
requested meeting would facilitate voluntary adjustments to 
airline schedules that could lead to a substantial reduction in 
travel delays. DOT can impose any conditions to this 
authorization.
    Paragraph (a)(3) requires the Secretary to notify airlines 
and foreign airlines that are providing service to the airport 
affected of the proposed discussions at least 3 days in advance 
of those discussions.
    Paragraph (a)(4) directs the Secretary or his 
representative to attend and monitor any airline discussion of 
their schedules.
    Paragraph (a)(5) mandates that any scheduling discussions 
be open to the public.
    Subsection (b) applies to any agreements reached as a 
result of the above discussions.
    Paragraph (b)(1) authorizes an airline to file with the 
Secretary a request for approval of any agreement reached as a 
result of the scheduling discussions and any modification of 
such an agreement.
    Paragraph (b)(2) authorizes the Secretary of DOT to approve 
any scheduling agreement if the Secretary decides that the 
agreement is not adverse to the public interest and is 
necessary to reduce delays and that the reduction cannot be 
achieved by any other immediately available means.
    Paragraph (b)(3) authorizes the Secretary to impose any 
terms or conditions on any agreement approved under (b)(2) that 
are needed to protect the public interest and to protect air 
service to non-hubs and small hubs.
    Subsection (c) sets forth the limitations on the 
discussions and agreements authorized above.
    Paragraph (c)(1) states that the airlines cannot discuss 
their prices or in-flight services.
    Paragraph (c)(2) states that the airlines cannot discuss 
specific city pairs.
    Subsection (d) states that the authority under this bill 
shall terminate on September 20, 2003, except that any 
scheduling agreement reached before then may continue after 
that date at the discretion of the Secretary.
    Section 2 amends section 41308 of Title 49 to authorize the 
Secretary of DOT to grant an exemption from the antitrust laws 
under the circumstances specified in Section 1 above. Although 
section 41308 is in a chapter covering foreign air 
transportation, this amendment to section 41308 is intended to 
apply to domestic air transportation.

                    Hearings and Legislative History

    On April 26, 2001, the Aviation Subcommittee held a hearing 
on H.R. 1407. Testimony was given by the Air Transport 
Association, the Regional Airline Association, and the National 
Air Traffic Controllers Association.

                        Committee Consideration

    On May 16, 2001, the Full Committee met in open session and 
approved H.R. 1407 by voice vote.

                             Rollcall Votes

    Clause 3(b) of rule XIII of the House of Representatives 
requires each committee report to include the total number of 
votes cast for and against on each rollcall vote on a motion to 
report and on any amendment offered to the measure or matter, 
and the names of those members voting for and against. There 
were no recorded votes on H.R. 1407.

                      Committee Oversight Findings

    With respect to the requirements of clause 3(c)(1) of rule 
XIII of the Rules of the House of Representatives, the 
Committee's oversight findings and recommendations are 
reflected in this report.

                          Cost of Legislation

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives does not apply where a cost estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974 has been timely submitted prior to the filing of the 
report and is included in the report. Such a cost estimate is 
included in this report.

                    Compliance With House Rule XIII

    1. With respect to the requirement of clause 3(c)(2) of 
rule XIII of the Rules of the House of Representatives, and 
308(a) of the Congressional Budget Act of 1974, the Committee 
references the report of the Congressional Budget Office 
included below.
    2. With respect to the requirement of clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, the 
performance goals and objective of this legislation are to 
reduce departure and arrival delays of airlines.
    3. With respect to the requirement of clause 3(c)(3) of 
rule XIII of the Rules of the House of Representatives and 
section 402 of the Congressional Budget Act of 1974, the 
Committee has received the following cost estimate for H.R. 
1407 from the Director of the Congressional Budget Office.

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 18, 2001.
Hon. Don Young,
Chairman, Committee on Transportation and Infrastructure, House of 
        Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1407, a bill to 
amend title 49, United States Code, to permit air carriers to 
meet and discuss their schedules in order to reduce flight 
delays, and for other purposes.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark Hadley.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

H.R. 1407--A bill to amend title 49, United States Code, to permit air 
        carriers to meet and discuss their schedules in order to reduce 
        flight delays, and for other purposes

    H.R. 1407 would exempt air carriers from antitrust laws 
through 2003, under certain conditions. Under the bill, air 
carriers could cooperate to limit flights at airports where 
scheduled flights exceed capacity if the Secretary of 
Transportation determines that such agreements would reduce 
travel delays and improve service to the public. H.R. 1407 
would require that a representative of the Department of 
Transportation (DOT) monitor discussions among airlines for 
this purpose, and that any discussions be open to the public. 
The bill would not allow air carriers to discuss fares, 
services, or the city pairs involved with such flights.
    Based on information from DOT, CBO estimates that the 
annual cost of monitoring discussions between air carriers 
would be negligible and subject to the availability of 
appropriated funds. H.R. 1407 would not affect direct spending 
or receipts; therefore, pay-as-you-go procedures do not apply. 
H.R. 1407 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact is Mark Hadley. This estimate was 
approved by Peter H. Fontaine, Deputy Assistant Director for 
Budget Analysis.

                   Constitutional Authority Statement

    Pursuant to clause (3)(d)(1) of rule XIII of the Rules of 
the House of Representatives, committee reports on a bill or 
joint resolution of a public character shall include a 
statement citing the specific powers granted to the Congress in 
the Constitution to enact the measure. The Committee on 
Transportation and Infrastructure finds that Congress has the 
authority to enact this measure pursuant to its powers granted 
under Article I, Section 8 of the Constitution.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act. (Public Law 104-4.)

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                Applicability to the Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act. (Public Law 
104-1.)

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                     TITLE 49, UNITED STATES CODE

           *       *       *       *       *       *       *



                    SUBTITLE VII--AVIATION PROGRAMS

           *       *       *       *       *       *       *


                    PART A--AIR COMMERCE AND SAFETY

                           SUBPART I--GENERAL


                    CHAPTER 401--GENERAL PROVISIONS

Sec.
40101.  Policy.
     * * * * * * *
40129.  Air carrier discussions and agreements relating to flight 
          scheduling.
     * * * * * * *

Sec. 40129. Air carrier discussions and agreements relating to flight 
                    scheduling

  (a) Discussions To Reduce Delays.--
          (1) Request.--An air carrier may file with the 
        Secretary of Transportation a request for authority to 
        discuss with one or more other air carriers or foreign 
        air carriers agreements or cooperative arrangements 
        relating to limiting flights at an airport during a 
        time period that the Secretary determines that 
        scheduled air transportation exceeds the capacity of 
        the airport. The purpose of the discussion shall be to 
        reduce delays at the airport during such time period.
          (2) Approval.--The Secretary shall approve a request 
        filed under this subsection if the Secretary finds that 
        the discussions requested will facilitate voluntary 
        adjustments in air carrier schedules that could lead to 
        a substantial reduction in travel delays and 
        improvement of air transportation service to the 
        public. The Secretary may impose such terms and 
        conditions to an approval under this subsection as the 
        Secretary determines are necessary to protect the 
        public interest and to carry out the objectives of this 
        subsection.
          (3) Notice.--Before a discussion may be held under 
        this subsection, the Secretary shall provide at least 3 
        days notice of the proposed discussion to all air 
        carriers and foreign air carriers that are providing 
        service to the airport that will be the subject of such 
        discussion.
          (4) Monitoring.--The Secretary or a representative of 
        the Secretary shall attend and monitor any discussion 
        or other effort to enter into an agreement or 
        cooperative arrangement under this subsection.
          (5) Discussions open to public.--A discussion held 
        under this subsection shall be open to the public.
  (b) Agreements.--
          (1) Request.--An air carrier may file with the 
        Secretary a request for approval of an agreement or 
        cooperative arrangement relating to interstate air 
        transportation, and any modification of such an 
        agreement or arrangement, reached as a result of a 
        discussion held under subsection (a).
          (2) Approval.--The Secretary shall approve an 
        agreement, arrangement, or modification for which a 
        request is filed under this subsection if the Secretary 
        finds that the agreement, arrangement, or modification 
        is not adverse to the public interest and is necessary 
        to reduce air travel delays and that a substantial 
        reduction in such delays cannot be achieved by any 
        other immediately available means.
          (3) Secretarial imposed terms and conditions.--The 
        Secretary may impose such terms and conditions on an 
        agreement, arrangement, or modification for which a 
        request is filed under this subsection as the Secretary 
        determines are necessary to protect the public interest 
        and air service to an airport that has less than .25 
        percent of the total annual boardings in the United 
        States.
  (c) Limitations.--
          (1) Rates, fares, charges, and in-flight services.--
        The participants in a discussion approved under 
        subsection (a) may not discuss or enter into an 
        agreement or cooperative arrangement regarding rates, 
        fares, charges, or in-flight services.
          (2) City pairs.--The participants in a discussion 
        approved under subsection (a) may not discuss 
        particular city pairs or submit to another air carrier 
        or foreign air carrier information concerning their 
        proposed service or schedules in a fashion that 
        indicates the city pairs involved.
  (d) Termination.--This section shall cease to be in effect 
after September 30, 2003; except that an agreement, cooperative 
arrangement, or modification approved by the Secretary in 
accordance with this section may continue in effect after such 
date at the discretion of the Secretary.

                    SUBPART II--ECONOMIC REGULATION

           *       *       *       *       *       *       *


                CHAPTER 413--FOREIGN AIR TRANSPORTATION

           *       *       *       *       *       *       *


Sec. 41308. Exemption from the antitrust laws

  (a)  * * *
  (b) Exemption Authorized.--When the Secretary of 
Transportation decides it is required by the public interest, 
the Secretary, as part of an order under section [41309] 40129, 
41309, or 42111 of this title, may exempt a person affected by 
the order from the antitrust laws to the extent necessary to 
allow the person to proceed with the transaction specifically 
approved by the order and with any transaction necessarily 
contemplated by the order.
  (c) Exemption Required.--In an order under section 40129 or 
41309 of this title approving an agreement, request, 
modification, or cancellation, the Secretary, on the basis of 
the findings required under section [41309(b)(1),] 40129(b) or 
41309(b)(1), as the case may be, shall exempt a person affected 
by the order from the antitrust laws to the extent necessary to 
allow the person to proceed with the transaction specifically 
approved by the order and with any transaction necessarily 
contemplated by the order.

           *       *       *       *       *       *       *


                                  
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